Continental & Schaeffler target Euro 400 M cost benefit

ERJ staff report (RD)

Hanover/Herzogenbaurach, Germany - Continental AG and the Schaeffler Group, its partner and largest shareholder, have agreed a purchasing operation, which will be the first large joint project between the two companies, a 3 April statement said.

According to the statement, Continental and Schaeffler have combined annual purchases of goods and services of nearly Euro 27 000 million. The purchasing operation, the statement said, is targeting a savings potential of Euro 350-400 million between 2009 and 2011.

“Continental and the Schaeffler Group will now operate in the market with a single purchasing strategy, uniform quality standards and a common supplier base,” said Karl-Thomas Neumann, chairman of the Continental board, in the statement.

Neumann said the purchasing operation will enable the company to buy the most advanced technology with maximum quality from the best suppliers. “This is an important element in maintaining the leading position of our companies in the market and transforming ourselves into a global champion of the automotive supplier industry,” he added.

One major aim of the purchasing operation is to halve the number of materials' suppliers to 2800. Another goal will be to achieve cost advantages by exchanging technology expertise and establishing value-added supply chains in the key vehicle manufacturing regions of Western and Eastern Europe, North and Central America, Asia and Brazil, the companies said.

As well as the purchasing volume for commodities and components, Continental and Schaeffler said they lay out more than $5 billion annually in investments and non-manufacturing activities, including logistics services, energy, office materials, IT hardware, telephone, travel and marketing.

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Press release Continental AG & the Schaeffler Group